Beacon Hill Institute: Cape Wind developer ‘blowing
smoke’ by ignoring costs of building offshore Plan for 130-wind turbines in Nantucket Sound is a lemon, a
bad deal in the making for taxpayers and ratepayers.

BOSTON - Standing by the
findings of its extensive cost-benefit analysis, the Beacon Hill Institute
today issued a point-by-point response to the developer of a proposed wind
farm on Nantucket Sound. Stressing that Cape Wind fails to take note of the
economic realities surrounding its project, BHI continues to argue that the
project, which aims to build 130 wind turbines on Nantucket Sound, is a bad
deal for taxpayers and electric power ratepayers.

In a report released this
week (March 16), three economists from the Beacon Hill Institute argue that
Cape Wind’s proposed 130-turbine wind farm in Nantucket Sound fails a
basic test: its economic costs ($947.2 million) exceed its economic benefits
($735.5 million). If the wind farm were built, it would impose a net cost on
society of $211.8 million. The only reason the project would be commercially
viable is the subsidy of $241 million that it would receive from federal
taxpayers and electric power ratepayers.

BHI recognizes that public
subsidies for alternative energy are valuable incentives and should be
encouraged. However, this subsidy, without which the Cape Wind project would
not be financially viable, exceeds by $74 million the subsidy to which the
project would be eligible on the basis of cost-benefit criteria.

Upon the release of
the BHI report, Cape Wind issued a five-page response seeking to discredit
the institute’s research and methodology. Claiming that BHI understated
the benefits to the public, Cape Wind, alleges that the institute’s
work is the result of "shoddy research."

"In fact, it is
Cape Wind’s remarks that are shoddy,” said David G. Tuerck,
Executive Director of the Beacon Hill Institute. "Before its leaders
attack our work on economic grounds," said Tuerck" tthey should
familiarize themselves with the principles of economics. Perhaps after
they have done so, we can engage in a constructive debate about the
economic merits of their proposal.” Tuerck further said, quoting
BHI's response, "Nothing that Cape Wind claims and no amount of
criticism that it hurls our way will change the reality here. The project
will turn Nantucket Sound into an industrial park chiefly for the benefit
of Cape Wind and not for that of the greater society."

Along with earlier studies on the Cape Wind project,
the BHI rebuttal to Cape Wind can be found here.